captioning sponsored by macneil/lehrer productions >> ifill: democrats and republicans pushed ahead on rival proposals to solve the debt crisis, drawing a veto threat and few signs of compromise. good evening. i'm gwen ifill. >> brown: and i'm jeffrey brown. on the newshour tonight, kwame holman has the latest on the back and forth, and we look at how we got here, and the tangled stakes in washington and on wall street. >> ifill: then, from oslo, we have an update on the weekend massacre, as norwegian authorities begin to release names of those killed. and the gunman's attorney says his client is likely insane. >> brown: we examine a new study showing a widening wealth gap between whites and minority americans.

>> ifill: paul solman has the story of a college program that turns convicts into graduates. >> this is my third time i'm being incarcerated. each time i was incarcerated before in the past i was always looking for the easy way out. this time i'm committed to educating myself. >> brown: and ray suarez explores the growing rift between ireland and the vatican over sexual abuse allegations. >> ifill: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> okay, listen. somebody has got to get serious. >> i think... >> we need renewable energy. >> ...renewable energy is vital to our planet. >> you hear about alternatives, right? wind, solar, algae. >> i think it's got to work on a big scale. and i think it's got to be affordable. >> so, where are they? >> it has to work in the real world. at chevron, we're investing millions in solar and biofuel technology to make it work. >> we've got to get on this now. >> right now.

the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> brown: much talk, but little movement: the high-stakes debt and deficit impasse continued today, and last night's dueling primetime speeches by president obama and speaker boehner only seemed to reinforce the bitter stalemate over raising the country's borrowing limit. newshour congressional correspondent kwame holman begins our coverage. >> reporter: it was house speaker john boehner who had the last word last night who was out again early this morning pushing his plan.

>> we have a bill that is a reasonable approach. negotiated with the senate leadership that really is common sense. it's reen obl. it's responsible. it can pass the house and it can pass the senate. i hope the president will consider signing it into law. >> reporter: meanwhile at the white house press secretary jay qarny again pushed the need for quick action as the president's advisors announced they'll recommend a veto of the latest house g.o.p. plan. >> time is running out. while we remain confident, we are also... we also understand some of the anxiety out there because we are pushing this to the last minute. that should not be the case. but in the end we believe congress will act appropriately. >> reporter: at issue now are two competing plans. speaker boehner's, a six-month $1 trillion increase in the debt ceiling coupled with $1.2 trillion in spending cuts and senate majority leader harry reid's plan which would raise the debt ceiling until 2013

andry deuce deficits by $2.7 trillion over ten years with only spending cuts. and today a new poll from righters showed continued public dissatisfaction with the failure to agree on a plan. 31% of respondents blamed congressional republicans for the breakdown in negotiations while 21% held president obama responsible. only 9% faulted democratic lawmakers. in his speech last night, the president urged americans to let their lawmakers know how they feel about the debt limit debate. by this morning congressional officials were reporting the house switchboard was near capacity and suggested back-up numbers but with votes on both plans scheduled for as early as tomorrow, it was far from clear either debt limit proposal has enough support to pass the house and senate and be sent to the president. on the senate floor, democratic leader reed urged republicans to hlp give his plan the 60 vote super

majority it likely will need. >> every single spending cut in the proposal has already been endorsed by republicans. have already been voted for by republicans in both houses of congress. in short it's everything republicans have demanded wrapped up in a bow and delivered to their door. >> reporter: reed suggested boehner's plan had no hope in the senate. >> speaker boehner's plan is is not a compromise. it was written for the tea party. not the american people. democrats will not vote for it. democrats will not vote for it. democrats will not vote for it. it's dead on arrival in the senate. >> reporter: but there also were indications that plan might not even get enough republican votes to pass the house. ohio republican jim jordan. >> i am confident as of this morning that there were not 218 republicans in support of the plan. >> reporter: the person responsible for delivering republican votes, whip eric cantor, told members in a closed-door meeting to stop grumbling and whining and come

together as conservatives. and with the two parties still apart in washington, in new york the new head of the international monetary fund warns that a failure to resolve the debt ceiling issue could damage not just america's economy. >> to have a default or to have, you know, a significant downgrading of the united states' signature would be a very, very very serious event. not for the united states alone but for the global economy at large because the consequences would be far reaching. >> reporter: and with the u.s. economy's triple-a credit rating also on the line, investor can only watch and wait with the clock ticking to the august 2 deadline now a week away. >> brown: apologies. we had one of those graphics wrong in that report. it was 9% democrats. now we look more closely now at

the entrenchment in washington, and the reaction on wall street, with gerald seib, a columnist and executive washington editor for the "wall street journal." andrew ross sorkin is a financial columnist for the "new york times," and co-anchors cnbc's "squawk box." and gillian tett is the s. managing editor for the "financial times." i want to go round quickly with a "where are you now"? >> we're in a mess. there's going to be a vote in the house tomorrow on the boehner plan. it's under siege from the right tonight not from the left. conservatives have come out and said it didn't do enough. we want more. we want a balanced budget amendment. there will be conservatives who vote against it. the question is can it pass the house? if it doesn't then the action moves to the senate and it will be harry reid's ball there. >> brown: what about on wall street and international marke? where are we today? >> international markets are absolutely on tender hooks because up until now there really has been a pretty... assution that sooner or later politicians would strike a deal. probably last minute but a deal would be done before

august 2. right now the thinking is not only is there a growing risk know the rating agencies could downgrade the u.s. even if there is a short-term band-aid solution but secondly there may not be a deal by august 2. so a lot of people in the financial markets right now are starting to look at what-if scenarios and creating plans for what they half jokingly call d-doom, potential default day. >> brown: andrew, you wrote about this what i'll call a delicate dance in which we hear warnings of the sqi falling but we also hear reassurances that this isn't going to happen. where do you see us today? >> that's actually the problem which is we're speaking or the politicians are speaking to two different groups. they're speaking to the public and the politicians around them as the obama administration saying that, you know, the sky is falling if you don't do this. on the other hand, they are saying we're going to get this done.

investors try to reassure them that this is a man made problem. it's a man made deadline. it also can have a man made solution. there is something disingenuous about both pieces of it. at the same time i think oddly enough while up until today people felt that there were rational minds, in fact i think obama's speech last night really showed how big the gulf is and how big the divide is and actually has people more nervous than before. >> speaking of divides, you tried to look at how we got here in your column. you see this as the culmination of long-term trends. >> behind the squabbling which looks silly on the surface there are big issues. a big and unresolved debate in this country about the size and role of government in the 21st century economy. that's not been resolved. this is in many ways a proxy for that. overlaid with that you have had increasing trend toward what i think is hyper partisanship in congress. the two rties starting out the republican party getting more conservative, the

democratic party getting more liberal over time over a generation there are fewer people in the middle from each party. you put those two trends together and you have a recipe for gridlock. you're seeing the consequences. >> brown: that, of course, is a debate that has taken place in many countries. how would you frame this question of divisiveness especially over the role of government? >> i think one of the key things is that financial markets have been locked not so much in a kind of beauty contest in recent months but in an ugly contest. investors around the world have been looking at first japan and seeing a lot of problems there. more recently the euro zone which is mired in its own quasicrisis. that has helped to distract a lot of the investors from the fact that washington is looking increasingly dysfunctional for the reasons we just heard. and the problem right now is that as andrew said investors are just starting to really wake up to the potential risks.

the speech we heard from the president last night really was not the speech reassuring in terms of polarization and the danger is that although we've not seen any reaction in the markets yet, we could see potentially pretty volatile times. >> brown: andrew these long-term trends that jerry started here that we're talking about. investors surely know of them. they've been with us for a long time. who are these investors that we're talking about? what are they looking at? are there other places that they can go first safe havens to invest their money? >> well, that actually is the ultimate question. you know, life is relative. the world is relative. where are you going to place your money? people are still betting on treasurys. in an environment where people are worried about the deficit ceiling next week and they're worried about this larger problem that gillian touched on which is we could get a downgrade from a standard and poors or a moody's irrespective of whether we actually beat the august 2

deadline or not because ultimately is there a longer term credible plan? and ultimately are we as a government, as a country, good for the money? th is the fundamental issue. and frankly given the stalemate in washington, there's becoming a larger question over time whether we will be good for that money. that's what standard and poors and moody's are going to be looking at. do we come up with a large, credible plan. that's why there's such a divide even over whether you come up with a short-term sort of stop gap measure or whether you actually need something that is actually large and big. >> brown: does that look like an increasing possibility that you get a deal but it's not quite the deal? and the credit we're.... >> that's the exact problem that people are now talking about can we just get over this august 2 deadline and have a short-term solution? you know punt until the next election. that may make sense politically but does it make sense from an economic standpoint?

does it create more uncertainty? do the rating agencies say you know what? we don't ultimately know where this country really lands. that's the big question. but you askd probably the most the smartest question which is even if that's the case, even if we get downgraded, will people stop buying treasurys? on a relative basis, we may still look like not a bad debt at least. >> but the problem in that scenario is that the cost to the government of getting money, of the price you have to pay in interest to get the money that you need will go up. if we're talking about a problem that is rooted in a deficit, a federal deficit that has grown dramatically in the last few years, you're now going to make that worse by making borrowing costs for the government higher. the irony is if the net result of trying to deal with the deficit will be to make borrowing costs higher so that the deficit becomes bigger rather than smaller over time, everybody will have shot themselves in the foot. >> starting with you, jerry, do you see much going on behind the scenes, contingency

plans, you know, what-ifs? especially here in washington? you start with washington. you're the treasury, the fed. >> i told somebody today that is striking how many old pros around washington are very worried right now. there is very little of that going on, at least very little that is evident. i think what will happen in the end is there will have to be an attempt by john boehner, republican of the house, and harry reid decratic leader of the senate to piece something together at the end. the dialogue between the white house and john boehner is strained to say the least right now. in the end there will be something different coming out of the house and something different coming out of the senate if anything can emerge from either of those places at all. ultimately you'll have to have the two partisan leaders of congress, i think, figure out how do we fix this at the 11th hour. if those conversations have started they're not very visible but they may be underway. >> brown: gillian, what do you see in terms of contingency plans either at the markets or at the fed? >> we wrote a story on the

front page of the financial times tomorrow pointing out you have a lot of money market funds, a lot of banks, a lot of asset managers right now who are basically stock piling money, getting ready for what could be a pretty turbulent couple of weeks. no surprise there. of course you've got the fed and other regulators talking about a lot of what-if plans. they're trying to keep the system moving smoothly and things. but to my mind, there are two key things that people need to watch over the next couple of weeks. firstly, are foreign investors going to carry on buying u.s. treasurys? and secondly, what is going to happen what finance calls the repo market. it's a bit like the transmission mechanism of a car. it tends to be ignored most of the time. but if it breaks down and something goes wrong there, the consequences could be quite nasty. there is a risk that with all these shenanigans if the u.s.

rating is downgraded or if there is even a technical default that that so-called repo market could start to seize up. that would be serious. >> brown: on that serious note, we will watch. i want to thank you all for now. gillian tett, jerry seib, andrew ross sorkin, thanks a lot. >> thank you. >> ifill: still to come on the >> ifill: still to come on the newshour, the tragedy in norway; the wealth gap in the u.s.; college classes in prison; and a diplomatic rift between ireland and the vatican. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: the debt ceiling stalemate in washington pulled stocks on wall street down today. trading was also relatively light, in spite a round of healthy earnings reports. the dow jones industrial average lost 91 points to close at 12,501. the nasdaq fell nearly three points to close at 2840. in afghanistan today, president hamid karzai rallied his country's security forces. he warned they face a challenging year ahead, as the u.s. military begins the first part of a phased withdrawal. in the last two weeks, seven

areas of the country have been handed over to afghan control. speaking in kabul, karzai told afghan troops they must step up even more, to eventually secure the entire nation by 2014. . >> in the coming three years this transition will be completed. that will be the day when the afghan nation celebrates taking responsibility of security. where afghanistan will be secured by its own people again. its sovereignty will be defended by them and we will defend its integrity. >> sreenivasan: the transition in afghanistan takes place as the pentagon navigates budget cuts. in washington, the nominee for head of the joint chiefs of staff discussed what he called a "new fiscal reality," and warned against tightening the purse strings by too much. president obama has called for $400 billion in military spending cuts over 12 years. during an exchange with republican senator john mccain, army general martin dempsey said proposals to cut more than that would be dangerous.

>> what would an $800 to a trillion dollar cut in defense spending over the next ten years do to our readiness, general? >> based on the difficulty of achieving the $400 billion cut, i believe $800 would be extraordinarily difficult and very high risk. >> sreenivasan: dempsey added the pentagon is currently reviewing how to make the cuts the obama administration has requested, and will present those options to the president. the u.n. is starting an airlift of food aid to drought-stricken parts of southern somalia. it is venturing for the first time in two years into areas that had been banned by the militant group al shabab. the world food program will send five tons of high energy bars into dolo, on the border with ethiopia, on thursday. the agency's feeding efforts will reach about 175,000 people. and it aims to stem the flow of people fleeing their homes to kenya and ethiopia in search of aid. weapons linked to a u.s. law enforcement operation targeting mexican drug cartels have been recovered from nearly 50 crime

scenes in mexico. that is according to a new report from republican congressional investigators. the controversial program, run by the bureau of alcohol, tobacco, firearms, and explosives, is known as "fast and furious." it was designed so a.t.f. agents could track illegal gunrunners along the border, but many of the weapons ended up in mexico. in washington, the a.t.f. official who oversaw part of the program came under fire today from the chairman of the committee investigating it. >> before this investigation ends i have to have somebody in your position or in justice admit you knowingly let guns walk because right now your agents, both the agents here today from mexico and the agents that were part of phoenix and part of this program who became whistle blowers have told us you were letting guns walk. >> sir, this investigation have not let guns walk. >> you're entitled to your opinion, not to your facts.

>> sreenivasan: as many as a thousand guns traced to the fast and furious program are still unaccounted for. the u.s. postal service is considering whether to shutter more than 3,600 post offices across the country. that amounts to more than one in ten of its retail outlets. postmaster general patrick donahoe said most of the cuts would be in rural communities with low volumes of mail. donahoe said the measures are necessary in the face of declining business. >> it's no secret that the postal service is looking to change a lot of things. it's driven by a large part on what makes sense financially and what makes sense for our customers and the communities that we support. we do feel that we are still very relevant to the american public and the american economy, but we also have to make some pretty tough choices as we work through some of the financial issues that we face. >> sreenivasan: post offices that close would likely be replaced by mail services in local stores, public libraries, or government offices. the postal service has already

cut about 130,000 jobs, and slashed costs by $12 billion over the last four years. democratic congressman david wu of oregon announced he is resigning after the debt ceiling vote. the seven-term congressman has been accused of having an unwanted sexual encounter with the teenage daughter of a campaign contributor. wu has said whatever happened was consensual, but democratic leaders called for a house ethics investigation. wu said resigning is in the best interests of his family. those are some of the day's major stories. now, back to gwen. >> ifill: and to the massacre in norway. authorities began today to publicly identify some of the victims of the friday attacks. so far, the list includes three from the bomb blast in oslo, where eight were killed, and just one from the shooting at the political youth camp on the island of utoya. 68 are known to have died there. some are still missing. we have a report from carl dinnen of independent television news in oslo. >> reporter: it's just a wristband. but it bears the name utoya.

it's from the camp. it says "i was there. i survived." yet anders behring breivik had stood within feet of her. >> he came into the next room, next to us. he was just on the other side of the door. >> reporter: how did you know he was in the next room? what was he doing? >> you heard the sound of his feet, like a movie in a way. and he was shooting. and then he stopped shooting. and we realized he was empty. he was going to fix it. and then we realized that this is the time to jump out of the window. it was pretty high but it's the best thing i've ever done, jumping out of that window. >> reporter: she escaped the island with her life. but she says she knew every single one of the people who did not make it. >> some of them i knew very well. and some of them i had not met

so often but they are still a close friend. it means so much to me. yeah, it's hard to bear. it's very hard to bear. >> reporter: does it seem real? >> no. >> reporter: images of the missing and the dead smile out from norway's newspapers. many more will appear as they are announced in the coming days. the lawyer who must defend the man responsible says he is most likely insane. has he shown any remorse or any regret for what he did? >> he said it was necessary to start a war here in europe as well as the western world. he thought it was necessary, that it was necessary, he said. >> reporter: was he expecting to survive and be arrested? >> no. >> reporter: he expected he would be killed or he would kill himself. >> he expected to be killed. >> reporter: he also told us breivik had taken drugs to stay alert.

as norwegians come together in grief, there are questions about whether the killer could have been stopped. the head of norway's domestic security service admitted they had seen his name but says they did not have a clear picture. was the decision not to investigate him after he came on this list the right decision? >> this was not a list as such. thiswas just a list that we had been in contact and paid a very small amount of... we had nothing further. if we had put him, i think half of norway would have been in our database. that's not the sort of country we are. >> reporter: norwegian intelligence are reviewing procedures but say they could not have stopped breivik. as for the woman, she is determined to return one day to utoya. >> i want to go back. it's still my island. it's still my paradise. >> reporter: she says then and

only then will she feel able to remove her wristband. >> brown: the police force in oslo continued to face criticism today over its response to the shooting spree on utoya. it took 90 minutes to reach the gunman, in part because the department doesn't own a helicopter and its boat broke down en route to the island. this evening police detonated explosives found on a farm leased i will the gunman. they believe he used fertilizer as the main ingredient in the oslo bomb. >> ifill: as the economy struggles to rebound, a new analysis of census data shows gaping wealth disparities have opened up among white, black, and hispanic americans. the pew research center found that this economic chasm, documented most recently in 2005, grew even worse during the housing bust and subsequent

recession. in 2009, white households had a median net worth of just over $113,000. compare that to $6,300 for latinos, and not quite $5,700 for african-americans. between 2005 and 2009, whites lost 16% of their median net worth, but latinos lost 66%, black households 53%, and asians-- who had topped white households in 2005-- dropped 54%. for more on the results of the study, we're joined by the report's lead author, paul talor of the pew research center. and roderick harrison of howard university. he is the former chief of racial statistics at the census bureau. paul, these numbers are amazing. white house holds median wealth 20 times greater than white house holds. what is the driver of these kinds of numbers? >> we're able to look at a before and after set of snapshots from 2005 to 009. in 005 the wealth gap ratios were roughly 10 to 1. they doubled to 20 to 1.

they were already big and they got even bigger. so what happened? >> the main driver of these disparate impacts was the housing market. blacks and hispanics have fewer financial assets. wealth is a combination of all your assets-- your home, your car, your 401(k), your stocks if you have them-- minus all your debts-- your mortgage, your car loan, your student loan, your credit card. the financial port polio of blacks and hispanics are much more dependent on their housing wealth than on anything else. when the housing market tanked as it started to in 2006 it disproportionately impacted blacks and hispanics. on top of that there was a regional impact. the housing market rose higher and fell more steeply in certain sections of the country. those were sections in particular that hispanics and also to some degree asians are disproportionately located in. you had sort of a double whamy. >> ifill: we also have been watching, rod rick harrison, the unemployment numbers in

which we see there is such a great gap between black unemployment for instance or youth unemployment than white unemployment. is this something that is connected or is is that a separate phenomena? >> it's related. i mean, wealth becomes an acculumation from income. you have to have savings to invest in a house, in stocks or bonds, in other things. and clearly historically some of the wealth gap when it was 10 to 1 reflected the lower incomes and therefore the greater difficulty of saving and investing. also it's very important going forward i think we'll have a generation of blacks and hispanics given this very severe drop who won't be able to contribute as they might historically have to their children's education and investment in their future so perhaps a downpayment for a home or other kinds of investments that typically are

very important to transmitting wealth to the next generation. even before inheritance. >> ifill: looking forward we see the potential for a trend. is that what brought us here or is this a spike that might go away once the economy rebounds especially the housing market? >> hard to know. it's hard to predict the future. as you say, the unemployment rates through this recession and this very slow jobless recovery you see blacks double the unemployment rate of whites and hispanics nearly at those same levels as well. at least at the moment and looking forward in the near term there's not a lot of prospect for hope if you're concerned about the economic fortunes of minority communities in this country. >> ifill: one of the things that people... go ahead. you were going to say something. >> i would be less... i think the prospects are very dim. the housing market is coming back very slowly. and it's coming back most slowly in the poor neighborhoods where these

homeowners are more likely to be. these are neighborhoods that got hit with sub prime and heavily with foreclosures so i think that the recovery is slow enough and i don't think housing will recover for years after employment does. >> ifill: that's... i was going to ask you if there's one bright spot at all in this economic picture right now it's that the stock market seems to be coming back. that somehow doesn't seem to affect these groups. >> well again as mr. taylor indicated the whites have much higher rates of owning stocks than blacks or hispanics do. some of the losses from the recession in the stock market in white net worth have been recouped as the stock market has risen. not fully recouped but that's part of what is causing the gap. both the losses in black and

hispanic. the white house holds lost net worth as well. but those who have assets other than a home are faring much better. >> ifill: right. there is a old phrase that seems to be true in this case which is the last people who were able to get in to buy a house bought them at a not fortuitous time. is is that what is also driving these numbers? >> there's a very poignant quality to that. if you think about the housing boom that began in the '90s and accelerated in the te '90s and into 2000 then it was born of a lot of things including good intentions. the belief that an expanding home ownership is good for the economy, it's good for the social fabric. indeed of those first-time home buyers as that housing boom went up, a disproportionate share were minorities. blacks, hispanics, asians, immigrants.

i think the country as a whole felt prey good about that. then of course we had, you know, the bills came due and everything crashed. you had folks obviously who were undercapitalized and probably shouldn't have been home buyers to begin with. you had predatory lending practices that we've all now seen. but you had, you know, in terms of his hispanics in particular is a population group that is very mobile that was drawn to those areas of the country, drawn literally to build those houses and in many cases to start their lives and get with a small downpayment to buy some of those houses but they did come late to the party. they purchased those houses at prices that were inflated by the bubble. >> ifill: which is why we see disparate in places like arizona and california. >> exactly. those are the states that have been hit the hardest and those are the states where his panics and asians in particular disproportionately live and were homeowners. >> ifill: are there government policies which are part of the problem or part of the

solution here or are they predatory lending private sector policies which should be address snd. >> both private and public i think one thing that we need to note is that income inequalities and class inequalities are larger in the united states than through europe. inter-generational mobility is greater than europe. we used to think of ourselves as the land of opportunity. europe is now making more efficient use of finding and allowing to rise talented people who are born in lower income brackets than the united states is. that doesn't speak well for global competitiveness so to the degree that both private sector and reliance on free markets that have some of these negative effects, the fact that we don't have government policy to the extent in europe that tries to temper the effects of these markets.... >> ifill: economic equality is

not a goal. >> and it is part of, i think what's killing the economy. again there is not enough consumer demand in the lower and middle income ranges it was sustained by debt. by accumulating debt. of course that was unsustainable. so we're now paying part of one cause of the great recession, think i, is is the greater income inequality and the degree to which it leaves insufficient purchasing power in the lower and middle income brackets. >> ifill: rod rick howard university and paul taylor, the pew research center, thank you very much. >> thank you. >> thank you. >> brown: now, a story about educating students, and preparing them for the world of work in a tough economy. the unusual twist: this program operates behind bars.

college-level programs were once common in prisons. that changed in the nineties when felons became ineligible for pell grants. newshour economics correspondent paul solman focuses tonight on how one program is tackling that challenge now, part of his ongoing reporting, "making sense of financial news." >> antonio ortiz. ( applause ) >> reporter: the graduation ceremony in upstate new york went off with the usual pomp this spring. >> i now grant you the degree of with all the rights and responsibilities there unto appertaining. congratulations. >> reporter: but the circumstances? out of the box. the 4 degrees granted that day were from bars, an elite liberal arts college in the nearby hudson valley. this rite of passage, however, took place in a maximum security prison. the grads, convicted felons

who for now can only hang their diplom in their cells. with 2.3 million prisoners, one in 100 adults, the u.s. locks up the most people anywhere in the world. and at the world's highest rate. repressive china comes in a distant second with 1.6 million inmates, closer to one in a thousand. u.s. imprisonment has soared seven fold since the late '70s when the "tough on crime" movement began. with good reason, many would argue. consider anthony cardnellis, a poster child for the drug and gun-crazed culture of the south bronx. >> what we would do is rob the drug dealers. the drug dealers do all the work. then we come by and take the money at the end of the day. which was the easier but very intense and extremely dangerous job. >> reporter: how do you stick

up drug dealers? >> it was who drew first and that determines what happens after that. >> reporter: who drew first as in a gun fight? >> yeah. i mean sometimes it turns out. but most importantly was who had the drop on who which was who was able to catch who without their gun. then i'll relieve you of your money and go on my way. >> reporter: but it wasn't always that simple. in 1991, during a shootout, cardknellis killed a man. . while he served time, bard initiated and helped staff a privately funded b.a. program that cardknellis signed up. total enrollment is now up to 250. >> how can i analyze this in order to have an impact? >> reporter: bard college is highly selective, admitting only 30% of applicants. bard behind bars is far pickier with an admission rate

rivaling harvard's says the program's founder max kener. >> you get the best 15 students at each place each year. typically you have roughly 10 applicants per spot. >> reporter: forget sats or gpa, some of these guys never even started high school much less finished it. the key criterion for admission is how badly do they want it? determined by an essay and interview. >> those students that are most intellectually ambitious, that are most curious are so often the same people as children who dropped out of conventional schools. >> how many people would you do in your survey? >> i would think what would be a representative number? this is a large study. maybe 1% of the population maybe. i don't know. i'll have to figure that out. >> reporter: the courses within these walls are nearly identical to those without. >> what is the decision-making process. >> reporter: the professor teaches the same class to

these inmates at woodburn correctional facility that he teaches to grad students at columbia university school of public health. yes, he acknowledges there is a difference. the students at woodburn are better. >> incredible. i have never had a student who reads everything. every page that i assign. and they do. >> how far in do we go on that issue? >> for example, we had a number of classes a student would say, the footnote on page 43 says this. i never read that footnote. there's so many stories like that where you just simply don't know the answer because they push you to become a better teacher. >> one of the things i'm concerned with about the survey.... >> reporter: admittedly this is a captive audience with study periods that last all day. but they sure do use them. michael is serving 17 to 35 for assault, just got a b.a.

in history. >> my senior project i dealt with construction. how history is created. and in dealing with that i had to interrogate the civil rights movement jacks the posed against the american revolution. >> reporter: this former drug dealer is a computer science majoror, interested in open source. >> i'm doing object oriented programming. the new system they brought in, python is the language. i do java on my own. >> reporter: what do you hope to do when you get out? >> pursue... right now i'm building programs. i would like to build massive programs that can be available to a lot of people at one time. >> reporter: this person is serving 20 to 40 years for robbery and assault. he got his bachelor's in comp lit in 2009. a master's last year. he reads the german philosopher walter benjamin. >> i used him for essays that

i wrote. >> reporter: an essay on a french poet adapted shakespeare the tempest. >> far from a degenerative process the adap tiff process allows the original to be experienced in different historical and cultural times without affecting a change in the original for an adaptation exists apart from the original. (laughing) this sounds like you're becoming one of those impenetrable academics. are you shooting to become a member of a social criticism department? >> not so much a criticism department. however, i would like to have a body of work out there one day that somehow was taken seriously. >> reporter: but even if israel doesn't end up as a tenured deacon instructionist, it seems a lot more broadly marketable than most of his peers. bard practices what so many academics preach: not vocational but liberal education.

like max kener got at bard. >> our belief is that a liberal education prepares people to find work wherever the job may be. you give them job training, for job-x, job-x disappears you have nothing. you give someone the opportunity to think critically and to understand the context in which they're looking for work, they go where the jobs are to be found. >> reporter: indeed even in today's job market, a b.a. seems to pay. ex-connor no. unemployment is just 4.4% for those over 25 with b.a.s. double that for those with some college or a two-year's associate degree. for a high school grad 10% and for high school dropouts, 14.3. a special ed student all his life, kyle didn't learn to read or write until prison. he got an associate's degree from bard. though he's up for parole next

year, he intends to stay to get his b.a. >> this is my third time being incarcerated. each time that i was incarcerated before in the past i was always looking for the easy way out, some program that i could try to get out of prison so that i could just go back and hang around the same neighborhood and do the same things that i did that led me here this time. this time i'm committed to bettering myself. and to educating myself. >> reporter: would you choose to stay here if it meant that you would get your degree? >> yes, sir. >> reporter: even if you could get out of prison? >> yes, sir. >> reporter: carlos, sentenced to 16 years for robbery and assault, majored in environmental studies at woodburn. he has gotten out. he's now gainfully employed as a recycling engineer. here showing one of his former bard professors around. >> we separate the toner, the circuitry, the plastic. >> reporter: he's one of 158 grads now just trickling out of prison. but so far almost everyone on

the outside has a job. suggesting a prison b.a.can be the ticket. >> but it begins with two things. it begins with the person identifying that they need or they want to excel. and you need an opportunity to excel. >> reporter: bard behind bars promotes both says rosado, nurturing rationality to cope with the often counterproductive impulses of human nature. >> plato, socrates, emerson. these are all discussions about understanding your personhood and understanding impulse and rationality. in a way to really maximize your steps in your decision in your mind and really to bring those things into alignments. why? because those things never disappear. rationality never trumps impulse and impulse never dominates rationality. >> reporter: what the bard prison program tries to do is redirect the impulses that put these men away while maximizing the rationality they need when they get out.

one such graduate is anthony cardknellis. he has come back to speak to those still working on their degrees and their sentences. >> bard is here for a reason. >> reporter: can bard actually place a self-described stick-up artist who did years in here for homicide in a meaningful, well-paying job? >> i don't care what state the economy is in. if one person is successful, then can i be successful. >> reporter: in other words, is that pep tal poppycock? or are bard grads getting real jobs? >> is it difficult? yes. is it impossible? absolutely not. >> reporter: you can judge for yourself in the next installment of this story. >> brown: we'll have the second part of paul's report on tomorrow night's newshour. >> brown: and we'll have the second part of paul's report on tomorrow night's newshour.

>> ifill: finally tonight, the breach between the vatican and one of the most catholic countries in europe, ireland. it grew even wider yesterday after a dramatic move by rome. ray suarez has our story. >> suarez: the vaet can's move to recall his ambassador was highly unusual. the archbishop was summoned back to the church's headquarters after the irish prime minister sharply denounced the way the vatican dealt with repeated child sex abuse scandals. ireland is 87% catholic. in an attack on the church unprecedented for an irish prime minister, he told his parliament the rape and torture of children were downplayed or managed to uphold instead the primacy of the institution in power, standing and reputation. his comments come on the heels of a judicial report released two weeks ago which revealed the vatican secretly discouraged irish bishops from reporting pedophile priests to police as was demanded by the dublin government.

the report also suggested the diocese of county cork failed to act on the allegations against 19 priests between 1996 and 2009. the vatican says archbishop, also known as the papal nunzio, was recalled to help prepare an official response to irish complaints. but in a statement the holy see said its action denotes the seriousness of the situation as well as surprise and regret at certain excessive reactions. for more we're joined by richard downes the washington correspondent for r.t.e., ireland's national television station. richard, did the report the examination of this one diocese in ireland show that the church there was covering up accusations of priestly child abuse in contravention of what they said they were going to do? >> yes and no. yes, they were.

no, waits not a surprise to anybody. we've had the friends report. we've had the report on the christian brother. we've had reports on the magdelene sisters. many reports going back 20, 25, 30 years. eve one has shown that the priests and the bishops of particular orders of diocese have covered up and have tried to dissuade the authorities from getting involved, the official legal authorities from getting involved but lots of people, the majority of irish people assumed this was somehow in the past. this was to do with the legacy of a very heavy handed catholic church and the legacy of a very light handed government authority. but this new report actually goes up to 2009. it shows that even up until the last few years the catholic church and indeed the vatican in its dealings with the catholic church have not been up front and 100% honest with the authorities. that was the comment of the

judge, the independent judge, who made the investigation. of course, it led to the extraordinary statement that you heard there from the prime minister from the ireland, saying that the vatican downplayed or managed the rape and abuse of children. an extraordinary thing to say. of course, the reason why it's significant is not just that it's one country, ireland, describing another country, the vatican-- technically it's another country in this respect-- but it's also pointing the finger at the church in general not just in ireland but also internationally saying catholicism has a deep problem to deal with. >> suarez: we saw that just small excerpt of what was a scathing statement from the prime minister in parliament and echoed by the attorney general, the minister for children. does this represent a change in the way ireland regards its relationship with the roman catholic church? >> i think if it does it's a change that has been a very long time in comin this whole episode, this whole

series of episodes started about 20, 25 years ago with a number of books and then a television series on our own television station exposing the cruelty and the torture of children that went on in a number of institutions. up until about 10, 15 years ago, a number of people including a number of the clerics involved, they were kind of able to say, look, this is an ice lated thing, a thing in the past but as time has gone on it has become abundantly clear that such was the power of the catholic church in ireland. that a number of people within that institution were able to continue the abuse right up until very recently and according to the report up until very recent times. but now nobody can be in any doubt. the number of reports, the number of investigations have been so extensive that, you know, it would be a fool who would disagree with them and try to play them down. yes, it is a watershed.

but there are still many, many other investigations to happen. this is just one diocese in one corner of ireland. there's also talk of an inquiry into another diocese. we'll have more of these reports. >> suarez: in this report, a senior cleric notes that he realized what a problem the church in ireland had when he started to read reports about the priestly abuse in canada, in the united states, in australia, and it struck him that these were irish-ordained, irish-born priests. so there is a connection to the scandal in the rest of the world? >> absolutely there's a connection to the scandal here in the united states. recently my own television station had a long documentary about priests alleged abuse in africa. of course many irish freehs went abroad. we produced a massive surplus of priests beings of christian brothers, of brothers, of nuns many of course who went and did great work abroad.

of course we exported a type of catholicism that for whatever reason-- and that hasn't been really clarified yet-- created this kind of sexual abuse monster. it happened in the united states. it happened in canada. it happened in australia. it happened in new zealand. it's very familiar. the names are irish. the mode us op-and-eye of the abusers involved was the same whether it was new zealand or the united states. so it's something that we did and something that happened out of ireland, if you like, that came out of ireland which is undeniable. and very recognizable. >> suarez: the vatican pulling back its nunzio is a very unusual step as we noted. what about the vatican reaction to irish rage at this? >> it's been very interesting, hasn't it, watching the vatican's reaction. many people in ireland are outraged by what the vatican has done because technically and on legal grounds the vatican is a country. but people in ireland know

that sit the representation of the catholic church internationally. many people in ireland feel that the archbishop who is the papal nunzio, the representative of the vatican in ireland and the vatican have been parsing and analyzing and being very legalistic in their approach. for example, there was a request of the vatican in a previous inquiry that they come up with some information about a particular abuser and a particular series of abusers in past. and the vatican didn't respond to that particular request. because it didn't go through the diplomatic channels of the papal nunzio and going back to rome and all the rest. the irish people feel that the vatican high school been very legalistic although the vatican say they've been following it straight down the line in addition to the diplomatic norms they have to follow. >> suarez: richard downes from r.t.e., thanks a lot.

>> suarez: for more, we're >> brown: again, the major developments of the day. democrats and republicans pushed ahead on rival proposals to solve the debt crisis, and drew a veto threat from the white house. and the norwegian government began to release the names of the victims in last friday's twin attacks. a lawyer representing the self- confessed killer said his client is likely insane, and believes he was a kind of savior. in our story on the debt crisis we identified republican congress eric cantor as his party's whip. that was of course wrong. he's the majority leader. we regret the error. and on our web site, there's more on the debt crisis, plus many other stories that have piqued our interest. hari sreenivasan has the details. >> sreenivasan: will bond vigilantes-- investors in u.s. treasuries-- start demanding higher interest rates? that's the subject of paul solman's latest post on our making sense page. our partners at globalpost tell the story of "nuclear gypsies," contract workers who brave

radiation for jobs near japan's earthquake-damaged nuclear plant. plus, did you know mongolia's temperature is rising faster than the global average? we talk to a reporter who traveled to the east asian nation. he found herders who live off the land are noticing changes from the uptick. all that and more is on our web site, newshour.pbs.org. gwen? >> ifill: and that's the newshour for tonight. on wednesday, we'll get an update on the union contract talks with major u.s. auto companies. i'm gwen ifill. >> brown: and i'm jeffrey brown. we'll see you online, and again here tomorrow evening. thank you, and good night. major funding for the pbs newshour has been provided by: chevron. we may have more in common than you think. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to

live a healthy, productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

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